Few industries in North America have suffered more than mold making as a result of China's emergence as a global manufacturing powerhouse since its admittance to the World Trade Organization in 2001. I have met many plastics professionals on both sides of the mold market who can regale you with stories of intellectual property theft, forced technology transfer, counterfeit products and more.
I do not believe it is an overstatement to say mold makers have been on the front lines of a trade war with China for nearly 20 years. And it may take another 20 years to understand fully all the damage to this sector — and this country — as a result of this war. So for many U.S. molders and mold makers, President Donald Trump's stand against China is long overdue.
But no matter how well-intentioned or justified a trade war might be, or how well it may eventually work out in the long term, it can be costly in the near term. That is the situation U.S. manufacturers, especially mold makers, are struggling with as we start the fourth quarter of 2019.
The U.S. manufacturing sector is currently in a period of modest contraction, and the recent uncertainty about the future trend in global trade is widely considered to be one of the reasons for the recent decline in U.S. manufacturing activity. And in case you missed it, that is the very definition of "irony."
There is no reliable, high-frequency source of data measuring activity levels for North American mold makers, but my own unscientific research indicates this industry has also been in a contraction phase for the past year or so. Demand for molds can be extremely volatile, but even moderate swings in the overall totals can represent huge hardships for some shops.
At the risk of sounding unrealistically optimistic, I will report some of the indicators I use to generate an outlook for the mold making sector are starting to look like they are at or very near a cyclical bottom. If this is the case, then demand for new molds could start to improve moderately in 2020. But there are other indicators that suggest the near-term risks to mold makers are still skewed to the downside. That's an economist's way of saying we may not have hit bottom yet.